Tesco tastes victory as battle to secure loyalty intensifies

Tesco is edging ahead of Sainsbury’s by merely consolidating its own position. Chris Longbottom assesses current grocery shopping behaviour. Further information is available from Chris Longbottom, TN AGB Superpanel’s client services director T

Shoppers are continuing the trend of picking up all their week’s shopping in one trip. This is good news for the multiple supermarkets, which are building more large superstore, providing everything from ready-made food at takeaway counters to clothes, household goods, and health and beauty products.

It is not so good for independent and specialist shops which are increasingly becoming destinations for “top-up” shopping – people spending small amounts on groceries when they run out, and spending as little as 2 to 3.

The growing move to one-stop shopping is one of the key findings of Taylor Nelson AGB’s yearly analysis of 10,000 households on its Superpanel for the eight weeks to March. These are the ten main results of this year’s study on grocery shopping behaviour:

Average household grocery spending is now a little more than 150 a month. The highest spend continues to be in the South-east (due in part to affluence), while the amount spent in Scotland has declined. The Scots, meanwhile, continue to spend less money, more frequently. However, the frequency of shopping in Scotland has declined, perhaps because of an increase in the number of multiples in the region.

Discounters and Co-operative Retail Services shoppers have the least amount of money to spend on groceries. People who shop at Waitrose (which has high penetration among ABs) and the major multiples have the most.

Discount shoppers have shown the greatest increase in grocery spend. However, interaction with multiples has shown no significant rise.

Sixty two per cent of households consist of two people or less, which has implications for grocery purchasing – a larger number of active purchasers are buying less groceries.

Many of the trends seen between 1994 to 1995 have continued in 1996, specifically, a further growth in grocery share for Tesco, Asda, Safeway and Morrisons and a continued declined in share for Sainsbury’s, Kwik Save, Somerfield, the Co-op, independents and discounters.

The gap between Sainsbury’s and Tesco in terms of the number of households shopping has widened – mainly because almost 500,000 fewer people shopped at Sainsbury’s during the eight weeks to March 10 than did so in 1995.

Asda, Safeway, Morrisons and Waitrose are the only outlets that have shown reasonable improvements in penetration levels.

Tesco not only has the highest penetration levels but also the highest spend per shopper. (Last year Sainsbury’s was the highest.)

Tesco’s spend per shopper has increased ahead of inflation, illustrating the success of the Clubcard at driving loyalty levels, both among existing and new shoppers.

Iceland has similar penetration levels to Asda and Safeway, as does Marks & Spencer, but with a much lower spend per shopper. Iceland’s loyalty is particularly low at nine per cent – indicating top-up frozen food purchasing from a high customer base. Loyalty means the amount that an outlet shopper actually spends at a store as a proportion of the total amount they spend across all stores, bearing in mind that most households patronise a number of grocery stores in an eight-week period.

Thirty-seven per cent of households shopped at discounters.

However, the cumulative spend at discounters is just under 87, yielding a low loyalty level of 30 per cent.

Aldi has the highest penetration of the “newer” discounters (5.3 per cent) and Netto the highest spend per shopper (50).

Food Giant has similar loyalty levels (39 per cent) to those of the key multiples – Asda (42 per cent) and Safeway (35 per cent) – which is driven by a much higher spend per shopper (117) than the average discount shopper (87).

The larger unit multiples (Sainsbury’s, Tesco, Asda and Morrisons) are visited on average five to six times in every eight weeks (about every ten days), and households spend between 20 and 25 per visit. Medium-sized unit multiples, Safeway and Waitrose customers also visit between 5.1 (Waitrose) and 6.1 (Safeway) times, with similar spend levels of between 17 and 19.

Loyalty levels tend to correlate with store size. As such, the larger unit multiples, Tesco, Sainsbury’s and Asda, have levels above 40 per cent. Kwik Save, Somerfield and Safeway’s levels are between 26 per cent and 35 per cent. There are, however, some exceptions. Morrisons has a loyalty level of 40 per cent, yet a 4.1 per cent share. It has larger stores and therefore a relatively high spend per shopper.

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